Hyprop takeover ‘will succeed’

Posted On Friday, 22 April 2005 02:00 Published by eProp Commercial Property News
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Listed property loan stock company Hyprop Investments is confident that SA Retail Properties unitholders will support its hostile takeover bid of the company.

Pieter PrinslooHyprop MD Pieter Prinsloo said yesterday SA Retail unitholders were “positive” about Hyprop’s offer.

This follows Hyprop saying on Wednesday that the majority of SA Retail unitholders had expressed opposition to SA Retail’s proposed transaction with sister fund Martprop.

Shortly before Hyprop unveiled its takeover bid at the end of last month, SA Retail Properties and Martprop announced a property deal that would see the two funds, both managed by Marriott, co-owning each other’s retail properties.

In terms of the agreement, if a third party tried to strip the assets out of SA Retail, Martprop would have a pre-emptive right to those properties.

But Hyprop said at the time that the SA Retail and Martprop transaction was not in the interests of SA Retail unitholders and constituted “frustrating action” in terms of the Securities Regulation Panel (SRP) code on takeovers, as SA Retail’s board had reason to believe a takeover bid might be imminent.

Hyprop has made representations to the SRP and wants it to issue a ruling that would see the SA Retail and Martprop transaction voted on by SA Retail unitholders.

It also says the SA Retail and Martprop transaction is a category one transaction in terms of the JSE Securities Exchange SA rules.

A category one transaction is one where the size of a deal is large enough to require the directors to take it to a company’s unitholders for approval.

Hyprop said 50,8% of SA Retail unitholders had confirmed in writing that they required the proposed Martprop transaction to be cancelled or at least subject to their approval.

The company said the percentage of SA Retail unitholders against the Martprop transaction was even higher at more than 85% if the unitholders with Marriott links were excluded.

Prinsloo said Hyprop’s offer to SA Retail unitholders was an “attractive proposition” with an implied value of R8,70 for each SA Retail unit.

This was about 7% more than the trading price of SA Retail units, he said.

Hyprop also said that because its offer remained subject to approval from competition authorities, its attorneys had approached SA Retail for information that was critical to documentation required by the Competition Commission.

“We have made it clear that all the costs of the merger notification will be borne by Hyprop and that any sensitive information can be passed directly from SA Retail to the competition authorities,” said Prinsloo.

“Unfortunately, SA Retail has not complied with our request to the detriment of its unitholders who would like to accept an unconditional Hyprop offer but cannot until we have Competition Commission approval.”

SA Retail MD Peter Sparks said the company was “quite surprised” that Hyprop “made those kind of statements at this stage in the process”.

Sparks said SA Retail’s directors would be releasing a Stock Exchange News Service announcement today, which would “highlight” important aspects of the Hyprop offer, which may not be in the “public domain at this stage”.

Last modified on Friday, 09 May 2014 16:27

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